/CL (Light Sweet Crude Oil Futures) Short Strangle: 2/24/2015 Closing Trade + New /CL (Light Sweet Crude Oil Futures) Short Strangle: 3/5/2015

/CL Opening setup/trade (Feb 25, 2015)
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SOLD -1 STRANGLE /CLK5 1/1000 MAY 15 /LOK5 67/30 CALL/PUT @.43

Closed the trade for 0.22 debit
Closing trade

Profit = $430 (credit collected from opening trade) – $220 (debit for buying back the strangle) = $210
Total commissions (opening & closing) = $14.84
Profit incl. commissions = 210 – 14.84 = $195.16


SOLD -1 STRANGLE /CLK5 1/1000 MAY 15/MAY 15 /LOK5 65/35 CALL/PUT @.41
Neutral bias
Order

Note: Commissions not included
Max. Profit = $410.00
Max Loss = $Infinite
Initial buying power reduction (BPR) =~ $1,500
Note: Unlike an Iron Condor the BPR for a short strangle can change drastically if the underlying makes a significant move either way.  Options on futures require low margin to start off with (use span magin).  The wings I bought were around a 5 delta (around 2 STD out each way).  However, this trade might require active management to keep deltas in check or the losses could be significant.
DTE = 42
BE = 34.58 & 65.36
POP =~ 88%
Max ROC  = 430/1,500 =~ 29%
Would look to take this off around 30%-40% of max. profit.

P&L diagram
Chart

 

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One thought on “/CL (Light Sweet Crude Oil Futures) Short Strangle: 2/24/2015 Closing Trade + New /CL (Light Sweet Crude Oil Futures) Short Strangle: 3/5/2015

  1. Pingback: /ZN Iron Condor & /CL Short Strangle Closing Trades | Gen ROC

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